2020 March 24, 09:38
M.Video-Eldorado Group Provides Business Update Related to COVID-19
The situation surrounding the COVID-19 outbreak is very fluid and it is difficult to predict the full impact on our business in 2020 due to developments both inside Russia and globally. In the course of the last weeks, Russian authorities have introduced a number of measures aimed at stemming the domestic spread of the virus. The situation continues to evolve rapidly, and the Company is monitoring developments to calibrate its own response on an ongoing basis.
M.Video-Eldorado Group President and Management Board Chair Alexander Tynkovan said:
“Our business motto has for many years been ‘We do care”, and this is true now more than ever. We have gone beyond the required measures to protect our team members and partners from potential risks. Several weeks ago we introduced a business travel ban, most office staff have been sent to work from home, we have cancelled public events and in-person meetings, and have imposed strict health monitoring for those remaining in offices. We are providing regular information updates to all staff regarding the situation. In addition, we have followed all health guidelines provided by the authorities at all of our facilities, and have put in place strict health monitoring and tightened safety and sanitation protocols at all locations.
“M.Video-Eldorado has already essentially become an online business, meaning our customers can view, pay for and arrange delivery of appliances and electronics with minimal or no contact. We have long sought to encourage online payments, for example, by offering increased loyalty points, allowing our couriers to deliver goods to the door in a safe and sanitary way.
“Our employees, customers and business partners are among our key stakeholders, and we will continue to seek ways to ensure that we are protecting both our business and our stakeholders’ interests as the situation develops.
“Regarding recent business performance, in March we saw increased trading activity that was primarily driven by the sharp changes in the RUB/USD exchange rate, as well as by people buying extra supplies in expectation of potential restrictive measures, such as a general quarantine, related to COVID-19. To date, thanks to the hard work of our management and staff, there have been no disruptions to major operations such as stock replenishment, logistics or payments.
“Looking ahead at business continuity, the Group is financially well equipped to cope with this unprecedented situation in the medium term. We have a strong balance sheet and a comfortable debt maturity profile. In addition, by being principally rouble-based and with all procurement on a DDP basis, we are more resilient to FX volatility, which is particularly important in the current environment.
“Our inventory position is very healthy: we have enough inventory to last through the back-to-school period, based on normal demand scenarios. While supplies from China have resumed, we continue to seek ways to secure supply chain stability and replenish stocks through domestic purchases, with a strong focus on critical product categories that are in high demand like essential household appliances, home office equipment and expendables. Moreover, our extensive inventory enables us to mitigate the major pricing fallout from the rouble weakness and to avoid price shock for consumers. Our pricing policy remains stable and competitive.
“We are tracking the situation 24/7, reacting to emerging challenges and making changes as needed. Our team is developing an action plan based on multiple scenarios with the aim of protecting our business in case pressure from the outbreak persists. We will provide further updates as appropriate, including as part of future operational and financial results disclosures.”